Which one of the following is not an instrument of selective credit control in India ?

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Q: 55 (IAS/1995)
Which one of the following is not an instrument of selective credit control in India ?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,158,159,70,42,47,158

keywords: 

{'selective credit control': [0, 1, 0, 0], 'consumer credit': [0, 1, 0, 0], 'regulation': [3, 1, 2, 9], 'variable cost reserve ratios': [0, 1, 0, 0], 'credit': [0, 2, 4, 6], 'india': [8, 1, 7, 13], 'rationing': [0, 1, 0, 0], 'margin requirements': [0, 1, 0, 0]}

The question asks which option is not a tool of selective credit control in India.

Option 1, Regulation of consumer credit, is a tool used by authorities to control the amount of credit available to consumers. This influences consumer spending and, thereby, inflation and the overall economy.

Option 2, Rationing of credit, is another selective credit control instrument where the central bank limits the amount of loans and advances that commercial banks can offer to their customers.

Option 3, Margin requirements, refers to the minimum amount that a customer must deposit in cash or securities when borrowing from a bank to buy securities.

Option 4, Variable cost reserve ratio, does not belong to the category of selective credit control methods, making it the correct answer. Reserve ratios are a monetary policy tool used by a central bank to control the money supply in the economy. They are not targeted at specific sectors of the economy or types of credit as are the other tools listed, so they are not considered a selective credit control instrument.

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